The wind industry was on track for a record year of installations in the U.S., the world’s second-largest renewables market after China. Now it’s threatened by COVID-19. U.S. renewable energy tax credits for wind and solar make developers reliant on a relatively limited number of investors willing to provide tax equity for projects, Greentech Media reported.
A few weeks ago, the biggest COVID-19 concern for renewable energy seemed to be the supply of equipment, given the pandemic’s early impact in China. Would there be enough solar panels, wind turbines and batteries to meet demand and project deadlines, given the widespread factory shutdowns?
Now the focus is shifting to demand in the face of an inevitable global economic slowdown.
Oil companies may be the most at risk of going under in this crisis, Barrons reported. They face not just declining demand as half the world shelters in place, but also a global supply war involving Russia and Saudi Arabia that could keep prices down for more than a year.
Energy makes up the largest portion of the high-yield debt market. Producers have taken on $120 billion in debt in the past five years, and much of it comes due in the next two.
“It’s pretty well known that when oil prices are below $40 a barrel, there’s going to be an increase in defaults,” NYU’s Altman said. “Now they’re below $30, so it’s pretty given that the industry’s going to suffer big time.”
